NationsBank Corp. said it will buy Montgomery Securities for $1.2 billion, joining big commercial banks eager to ride Wall Street’s raging bull by building up strong investment banking franchises.
The deal, announced Monday after about a week of rumors, will allow NationsBank to achieve its aspirations of becoming a major player in the investment banking arena by giving it a formidable stock underwriting and research operation.
NationsBank, based in Charlotte, N.C., is known primarily as a retail bank. It began underwriting bonds for corporations and government agencies about three years ago and also is an adviser to companies on mergers and acquisitions.
San Francisco-based Montgomery Securities is strong in stock underwriting and research but needed a partner to enhance its debt financing and loan syndication business. The privately held investment bank had been shopping for a minority partner.
The deal will allow the companies to offer their clients one-stop shopping for everything from advice to arranging debt, equity or loan syndication financing.
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